Adani Wilmar IPO: What GMP signals after closure of 3-day subscription
Adani Wilmar GMP today is ₹30, which is 12 higher from its yesterday's grey market premium of ₹18, say market observers
PremiumAdani Wilmar IPO: After closure of 3-day subscription of Adani Wilmar IPO (Initial Public Offering), the public issue worth ₹3,600 crore has been subscribed 17.37 times whereas its retail portion got subscribed 3.92 times. This strong subscription got reflected in the grey market sentiment as well. According market observers, Adani Wilmar share price in the grey market managed to surge today after falling for near one week. They said that change in market sentiment has also played a major role in lifting the morale of grey market in regard to Adani Wilmar IPO.
Adani Wilmar IPO GMP
Market observers said that Adani Wilmar grey market premium (GMP) today is ₹30, which is 12 higher from its yesterday's grey market premium of ₹18. They said that rise in Adani Wilmar IPO GMP today can be attributed to two major reasons — trend reversal ahead of the Union Budget 2022 and strong subscription status. They said that the secondary market sentiment had remained negative for near two weeks that led to slide in Adani Wilmar IPO GMP from ₹65 to near ₹18 in around one week. However, they said that shares of Adani Wilmar may regain its lost ground if the market manages to extend is rally post-budget presentation.
What this GMP mean?
Market observers said that GMP is nothing but an unofficial data that signals about the listing premium one can expect from a particular public issue. As Adani Wilmar IPO GMP today is ₹30, it means grey market is expecting Adani Wilmar IPO listing at around ₹260 ( ₹230 + ₹30), which is around 13 per cent higher from its price band of ₹218 to ₹230 per equity share.
However, stock market experts maintained that GMP is not an ideal indicator of listing premium as it has nothing to do with the financials of the company. They said that one should look at the balance sheet of the company as it gives clear picture of the company fundamentals.
Highlighting the fundamentals of Adani Wilmar; Anuj Jain – Research Head, Co-founder – Green Portfolio Pvt Ltd said, "The company commands 18.3 per cent market share in edible oil. At Mcap to sales of less than 1 and PE of around 36 at issue price, Adani Wilmar Ltd is a clear Buy with a suggestion to hold it for long term. As the Food and Industry Essential business will grow (where AWL has ambitious plans), the PE re-rating is imminent."
Abhay Doshi, Founder at UnlistedArena.com said, "Adani Wilmar is one amongst the few large FMCG food companies. Their flagship brand “Fortune" is the largest selling edible oil brand in India. The concern of low PAT margins is addressed by focusing on value-added products and diversifying revenue streams. The distribution network of Adani Wilmar is the largest in edible oil segment."
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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